The productivity slowdown and the declining labor share: a neoclassical exploration

Gene Grossman, Elhanan Helpman, Ezra Oberfield and Thomas Sampson

LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library

Abstract: We explore the possibility that a global productivity slowdown is responsible for the widespread decline in the labor share of national income. In a neoclassical growth model with endogenous human capital accumulation a la Ben Porath (1967) and capital-skill complementarity a la Grossman et al. (2017), the steady-state labor share is positively correlated with the rates of capital-augmenting and labor-augmenting technological progress. We calibrate the key parameters describing the balanced growth path to U.S. data for the early post-war period and find that a one percentage point slowdown in the growth rate of per capita income can account for between one half and all of the observed decline in the US labor share

Keywords: neoclassical growth; balanced growth; technological progress; capital-skill complementarity; labor share; capital share (search for similar items in EconPapers)
JEL-codes: E25 O40 (search for similar items in EconPapers)
Date: 2017-10-01
New Economics Papers: this item is included in nep-dge, nep-gro, nep-ltv and nep-mac
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (59)

Downloads: (external link)
http://eprints.lse.ac.uk/86597/ Open access version. (application/pdf)

Related works:
Working Paper: The productivity slowdown and the declining labor share: a neoclassical exploration (2017)
Working Paper: The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration (2017)
Working Paper: The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration (2017)
Working Paper: The Productivity Slowdown and the Declining Labor Share: A Neoclassical Exploration (2017)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ehl:lserod:86597

Access Statistics for this paper

More papers in LSE Research Online Documents on Economics from London School of Economics and Political Science, LSE Library LSE Library Portugal Street London, WC2A 2HD, U.K.. Contact information at EDIRC.
Bibliographic data for series maintained by LSERO Manager ().